UK current account fraud surges in first quarter of 2011, according to Experian

Q1 was second busiest quarter for mortgage fraud ever recorded by Experian Fraud Index

UK current account fraud surges in first quarter of 2011, according to Experian
Q1 was second busiest quarter for mortgage fraud ever recorded by Experian Fraud Index

Nottingham, 26 July 2011 — The latest Fraud Index from Experian®, the global information services company, has revealed a sharp increase in fraudulent attempts to open current accounts in the UK during the first three months of 2011.

35 in every 10,000 current account applications were detected as being fraudulent during the first quarter of 2011. This was 58 per cent higher than in Q4 2010 and saw current account application fraud overtake mortgage and automotive finance fraud rates to become the most targeted financial product for the first time.

Attempted mortgage fraud increased by seven per cent quarter-on-quarter during the first three months of the year. 34 in every 10,000 applications were uncovered as fraudulent during Q1, the second busiest period for mortgage fraud ever recorded by Experian’s Fraud Index. This rate was eclipsed only by Q2 2010, when the rate reached 35 in every 10,000 applications. 

20 in every 10,000 applications for financial products were found to be fraudulent during Q1 2011, an increase of 24 per cent on the previous quarter (Q4 2010). This was, however, lower than the 27 frauds found in every 10,000 applications found during Q1 2010. 

Experian’s Fraud Index is based on data derived from National Hunter and Insurance Hunter, the UK’s leading fraud prevention systems, operated by Experian on behalf of their members.  These systems enable financial institutions to cross-match applications against over 100 million previous application records in order to spot commonalities and anomalies that are potentially indicative of fraud for further investigation.

Nick Mothershaw, Director of Fraud & Identity Solutions at Experian, comments: “As increasingly sophisticated identity verification and fraud prevention technologies have made life more difficult for fraudsters, some have turned their attentions to current accounts, believing them to be a softer target to then launch attacks on more lucrative credit card and mortgage products.

“With signs that account takeover fraud is also increasing, fraudsters are becoming even more calculating. It is vital that financial service providers accurately validate and verify the identities of the people they interact with and are using every technique at their disposal to restrict the significant damage fraud does to the bottom line.” 

Fraud rates by financial product type

Automotive finance
The automotive finance sector has seen a decrease in attempted fraud, down 21 per cent on the previous quarter. With 27 attempted frauds for every 10,000 applications, automotive finance still remains one of the most frequently targeted products.

Credit cards
Credit card fraud rates remained at 11 in every 10,000 applications during Q1 2011, despite a small increase in fraudulent activity since Q4 2010. The rate of attempted fraud at the point of application was, however, 69 per cent lower than during the first quarter of 2010.

12 in every 10,000 insurance applications and claims were found to be fraudulent during Q1 2011. This represents an increase of almost four per cent from Q4 2010 and 43 per cent from Q1 2010.


Chantal Heckford / Sarah Tye / Kate Douglas
Lansons Communications
020 7490 8828 / /

About Experian
Experian is the leading global information services company, providing data and analytical tools to clients in more than 80 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.

Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2011 was US$4.2 billion. Experian employs approximately 15,000 people in 41 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.

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